AIG Datapoint of the Day

In the United States, A.I.G. has more than 375 million policies with a face value of $19 trillion. If policyholders lost faith in A.I.G. and rushed to cash in their policies all at once, the entire insurance industry could falter.

Sorkin also quotes AIG’s current CEO firing directly at the structure set up by AIG’s former CEO, Ace Hank Greenberg:

"You have an insurance company that works really well and on top of it is a holding company and the holding company’s biggest asset is this huge hedge fund,” Edward M. Liddy, who became A.I.G.’s chief executive last fall, told me.

Sorkin doesn’t quote Delaware chancellor Leo Strine on the subject of Greenberg and his "Inner Circle":

The Complaint fairly supports the assertion that AIG’s Inner Circle led a — and I use this term with knowledge of its strength — criminal organization. The diversity, pervasiveness, and materiality of the alleged financial wrongdoing at AIG is extraordinary.

And he’s not even talking about AIG Financial Products and its sales of credit default swaps!

Joe Nocera does a great job of explaining how AIG managed to scam the system to generate enormous amounts of income; unfortunately there seems to be no way that the government can claw that income back. But I do wonder whether we might not see some criminal complaints against former AIG executives at some point. They are, as Nocera says, the people who turned AIG into "ground zero for the practices that led the financial system to ruin".